ATIDI not only weathered the storm but thrived

You took over as ATIDI’s CEO three years ago with the goal of strengthening the business’ developmental mandate, focusing on support for trade and investments as well as the private sector in Africa, while at the same time growing the business’ reputation and brand globally. Could you outline the successes you’ve had and what you’ve achieved in this regard?

Manuel Moses: I assumed leadership at the peak of the Covid-19 pandemic, and it’s safe to say that uncertainty was pervasive. However, we rallied together, adapting to the challenges and not only survived but emerged even stronger. Our business thrives in a counter-cyclical manner, which proved advantageous.

During this time, we played a pivotal role in supporting critical sectors like healthcare and the food supply chain. Simultaneously, we embarked on a rebranding journey to better reflect our developmental mission, which revolves around providing trade and investment insurance. ATIDI now has a crystal-clear strategy, aiming to double our business within the next five years. As a strategic move, we’re actively expanding our involvement in trade financing, recognising its indispensable role in facilitating intra-African trade.

While problems did arise, they were not as catastrophic as anticipated. Our exposures proved to be resilient and capable of withstanding significant pressure. This was a testament to the thoroughness of our risk assessment process and expertise. When demand plummeted, many companies were left struggling to stay afloat. However, ATIDI not only weathered the storm but also thrived in the face of adversity, by promptly recognising the changing market conditions, adjusting our strategies accordingly and working with the lenders, in order to tap into emerging opportunities.

Africa remains an attractive investment destination with unique opportunities waiting to be tapped into. And with a population of over 1.3bn people, the continent boasts a young and growing population, an emerging middle class as well as abundant natural resources such as oil, gas, minerals and arable land, which provide lucrative investment opportunities across various sectors.

These factors create a conducive environment for business expansion and profitability. Therefore, there is absolutely no reason why one should not invest in Africa, especially with the protection provided by ATIDI’s investment-grade rating of A/Stable by S&P and A/Positive by Moody’s, which not only provide a sense of security for potential investors but also ensure that investors can navigate through any uncertainties with confidence. Now is the opportune time to seize the untapped potential that lies within Africa’s borders, as the continent continues on its path towards development and integration.

It is also important to note that African governments have made significant strides in improving their business environments. Many countries have implemented pro-investment policies and streamlined regulations to attract foreign direct investments. Additionally, regional integration initiatives like the African Continental Free Trade Area (AfCFTA) promote intra-African trade and create a more conducive environment for investors.

ATIDI is committed to supporting green energy initiatives. What key achievements have you made in Africa, and what do you consider to be your key long-term goals when it comes to net zero?

Even before the Covid-19 pandemic, the world was slipping into a climate crisis. We have been doing our part as an organisation by promoting green energies.

ATIDI’s support for green energy initiatives has focused on financing renewable energy gaps projects through our core products which are the African Energy Guarantee Facility (AEGF) and the Regional Liquidity Support Facility (RLSF).

AEGF is a consortium of European Investment Bank (EIB), KfW and Munich Re that provides ATIDI with access to a pool of reinsurance capacity of €821m.

RLSF is a joint initiative of ATIDI, the KfW Development Bank and the Norwegian Agency for Development Cooperation (Norad) that is designed to address the short-term liquidity risks faced by IPPs that sell electricity to state-owned power utilities – improving bankability and helping such projects reach financial close.

Our achievements include support to renewable energy projects in Burundi (Mubuga Solar PV), Malawi (Salima, Golomoti and Nkhotakota Solar PV) and Uganda (Salima, Golomoti), to name just a few.

In simple terms, net zero means reducing greenhouse gas emissions as close to zero as possible, with all remaining emissions being reabsorbed by the atmosphere, by the oceans and forests. Commitments to net zero must be supported by credible actions. The energy sector is today responsible for around three quarters of greenhouse gas emissions and holds the answer to approaching net zero. For example, increasing energy from renewable sources, such as wind or solar power, would significantly reduce carbon emissions.

To achieve this, many obstacles must be removed and investors must be given confidence, and ATIDI continually explores market gaps to develop innovative products. This is the case with our RLSF and AEGF products which we will improve and adapt to market needs, including the development of additional initiatives likely to attract climate finance.

Do you expect to revolutionise the investment landscape to any extent in Africa and if so, how?

ATIDI’s role is to support investors to cover the real and perceived investment risks in Africa. Up until the end of 2022 we supported trade and investment transactions valued at over $78bn in Africa. We offer an investment grade rating to African sovereigns who are predominantly sub investment grade. Our “A” rating plays a pivotal role in empowering member states to access global financial markets with reduced borrowing costs, ultimately promoting economic growth and stability across the continent.

We are showing that all these funds could not have come to Africa if the perception was that of high risk. Our vision is that by just looking at our track record, investors get to see that the perception is not the reality.

ATIDI’s presence and guarantees enhance the creditworthiness of a country in the eyes of lenders and investors. When investors see that their investments are protected against political risks such as expropriation or breach of contract, they may be more willing to invest in that country. As a result, African governments can attract more FDI, which can reduce their reliance on costly debt financing.

ATIDI recently insured a €300m loan facility issued by Deutsche Bank to the Government of Tanzania. Can you explain the importance of this deal?

This transaction stands out as one of the pivotal achievements in our portfolio this year. It exemplifies our vital role in supporting our member states in two fundamental ways: firstly, by enabling them to access international markets, and secondly, by assisting them in securing lower funding costs.

ATIDI covered a Term Loan Facility of up to €300m whose purpose was to finance infrastructure projects included in the country’s 2022/2023 budget. The facility serves as a facilitator for crucial economic sectors aligned with the ESG goals, including infrastructure, education, and healthcare. This aligns perfectly with ATIDI’s core mission, as we strive to fulfil our developmental role and ensure that our support directly impacts the lives of the people.

Additionally, our support demonstrates ATIDI’s commitment to align with the country’s development agenda as envisioned in its National Development Vision 2025 and reiterates ATIDI’s commitment to partner with the government to address key economic drivers in Tanzania. This transaction serves as an example of how ATIDI is partnering with African governments to advance our member state’s critical developmental goals and we are proud to have accomplished that for the government of Tanzania and in many other African countries across the continent.